Sacramento County officials said Tuesday they could lose $9 million this fiscal year because of state budget cuts that Gov. Jerry Brown and lawmakers tied to the federal health care overhaul.
The county has provided indigent health care for 14,000 of its poorest residents who had few other options, receiving state subsidies to help pay for it.
But under the federal Affordable Care Act, most of those residents will become eligible for the first time next year for Medi-Cal, with the federal government initially paying the tab.
Because local governments won't have to pay for indigent residents who move into Medi-Cal, Brown and lawmakers earlier this year cut $1.5 billion that had been subsidizing county health care programs across California.
Sacramento County says that it will lose as much as $9.2 million as part of that reduction.
Local government associations, social service groups and advocates for the poor have criticized the statewide reduction, saying it's unknown how much counties will save and that the governor has overestimated how much federal changes will help county budgets.
Sacramento County officials warn that under state law they still have to pick up costs for indigent residents who fail to sign up for Medi-Cal.
But H.D. Palmer, spokesman for California Department of Finance, said Tuesday the cuts make fiscal sense given that the state will pick up former county costs for health care.
"The state cannot and should not pay for the same service twice," Palmer said.
Sacramento County supervisors and social service officials discussed how they might respond to the state cuts during a workshop Tuesday on the Affordable Care Act.
Before Brown announced the health care cuts, Sacramento County had already cut $7 million because it had assumed savings from moving people to Medi-Cal, said Sherri Heller, health and human services director.
Heller said she at first thought the county's health care budget was going to have a $16 million deficit as a result of Brown's $9 million cut and the county's $7 million reduction.
But she now anticipates a smaller deficit because the county and hospitals should be able to move most people now in the County Medically Indigent Services Program into Medi-Cal, leaving the county responsible for fewer people.
Depending on how successful the county is in moving its poorest residents to Medi-Cal, Heller told supervisors that she estimates the county will have a deficit of $3 million to $9 million in CMISP.
"All this depends on the success we have with enrollment," she said.
The county expects to have most CMISP clients enrolled in Medi-Cal by the end of March. About 11,000 clients in another county service for the poor, the Low Income Health Program, will automatically move to Medi-Cal on Jan. 1.
The Sacramento County Department of Human Assistance will engage community groups as part of a large outreach effort in coming months, Director Paul Lake said.
However, the county administration will also recommend that the board eliminate county-funded indigent care for people who are eligible for Medi-Cal and don't have good cause for failing to enroll, Heller said.
She said a very small portion of the clients would likely be subject to such cuts.
Supervisor Don Nottoli said he had reservations about such a policy and questioned whether it would be legal. But County Counsel John Whisenhunt said he didn't see a problem.
"I'm comfortable with some type of personal responsibility," he said. "Someone can't blow off the county and then come back and expect the county to pick up the tab."
Supervisors will receive a more precise estimate of the deficit Sept. 10, when they revisit the annual countywide budget. It's not clear how the county might close the deficit, but health care for the poor is required under state law, so supervisors may have to look to other programs for cuts.
Call The Bee's Brad Branan, (916) 321-1065. Follow him on Twitter @BradB_at_SacBee.